There are various subcategories of issues that need to be addressed in a divorce settlement or final order from acourt. Not only do you need to make decisions about various different things – including the debt that you and your spouse have gathered over the years – but you also need to think about what steps you can take to protect your financial future. Parties sometimes expect their debt and loans will be split in a certain way – only to find that a court may see things differently.
Just like a marital home, and various other assets, debt acquired during the course of a marriage can be regarded as marital debt, and therefore allocated between the spouses involved. Commonly, this means that couples during a divorce will have a choice to either settle the responsibility for debt before filing for divorce in a negotiation, mediation, collaborative law or other process, or a determination or agreement will be made while a divorce makes its way through the court system. Ultimately, the court will make the decision if the parties do not settle ahead of time.
The New York Domestic Relations Law indicates that financial obligations taking place through a marriage which aren’t the sole responsibility of one spouse, can be offset against the total marital assets that need to be divided. However, there needs to be some kind of proof showing that the debts in question were created for marital purposes. In other words – it’s up to the person who is claiming marital debt to prove that the debt they’re referring to was incurred for marital purposes (like paying household bills, rather than a separate vacation for example). Continue reading ›